photo: BrightSource Energy

I wrote this story for Grist, where it first appeared.

Some good news on the environmental front for a change: Global investment in green technology in the first quarter of the year spiked 52 percent compared to the previous quarter, to $2.57 billion. That’s according to a report released Tuesday by the Cleantech Group, a San Francisco research and consulting firm.

The increase represents a 13 percent jump over the first quarter of 2010, and indicates that investors’ appetite for renewable energy, electric cars, and other green technologies continues to rebound from the recession.

But the numbers aren’t exactly good news for entrepreneurs toiling away in their garages on the next new thing. The first quarter results show that investors are focusing on existing portfolios rather than financing a lot of new startups. In fact, 93 percent of that $2.57 billion represented so-called follow-on investments.

“In the first few months of the new year there have been a rash of large later-stage deals which have propelled 1Q11 to the second highest quarter ever for clean tech VC investment,” Sheeraz Haji, the Cleantech Group’s chief executive, said in a statement. “It’s encouraging to see some big private equity firms entering the space.”

So who got the money?

Solar companies were the big winners, taking in $641 million in 26 deals, according to the Cleantech Group. About a third of that went to a single startup, BrightSource Energy, the Oakland, Calif., solar thermal power plant builder. And venture capitalists seem to have a renewed appetite for cutting-edge thin-film photovoltaic technology, an area they poured a couple of billion dollars into back during the green tech boom. One such startup, MiaSolé, scored $106 million in the first quarter.

Electric cars also proved popular among investors as the new year got underway. Fisker Automotive, a Southern California startup building a super sleek plug-in hybrid sports sedan called the Karma, took in $150 million. At the other end of the electric spectrum, Coda Automotive, another SoCal startup, took in $76 million for its middle-of-the-road four-door.

Biofuels are back as well, taking in $148 million. The largest share, $75 million, went to a California company called Fulcrum Bioenergy, which is developing a process to turn municipal waste into ethanol.

North America still accounts for the lion’s share of investment — 85 percent in the first quarter, a 43 percent rise from the same period last year. And Silicon Valley’s Kleiner Perkins Caufield & Byers did the most deals — nine.

But in a sign that corporate America is increasingly seeing green tech as a good bet, GE Energy Financial Services took third place for the number of deals done.

Global venture capital investment in green technology companies reached $4.04 billion in the first half of 2010, exceeding – slightly — the record set in the boom year of 2008, according to a preliminary report released Thursday by the Cleantech Group and Deloitte.

Venture investment in the second quarter rose to $2.02 billion, up 43 percent from the year-ago quarter. Investments in the first half of the year spiked 65 percent from the same period in 2009.

“There’s been a very clear resurgence in solar activity and that is largely responsible for the strong quarter,” Richard Youngman, the Cleantech Group’s head of global research, said on a conference call Thursday.

Solar captured $811 million, or about 40 percent, of green technology investment in the second quarter, according to the Cleantech Group, a San Francisco-based consulting and research firm. It defines the global market as consisting of North America, China, India, Israel and Europe.

It’s no coincidence that both companies have been the beneficiaries of the Obama administration’s push for renewable energy. Solyndra received a $535 million loan guarantee to build a new factory in the San Francisco Bay Area (which the president visited in May) and BrightSource was granted a $1.37 billion loan guarantee to get its first solar thermal power plant online.

Despite the recession, corporate America poured a record $5.1 billion into green tech companies in the first half of 2010, a 325 percent increase from a year ago.

“The significant strengthening of corporate and utility investment into the cleantech sector, relative to 2009, is very encouraging, given the key role they will play in enabling broader adoption of clean technologies at scale,” Scott Smith, partner, Deloitte’s U.S. clean tech leader in the United States, said in a statement.

Youngman warned not to read too much into the success this week of Tesla Motor’s initial public offering. Though the Silicon Valley electric carmaker’s share price accelerated some 40.5 percent on opening day, he pointed out that high-profile IPOs from Solyndra and Goldwind, a Chinese wind turbine maker, were pulled recently.

In fact, head east if you want to get in on a booming IPO market –12 of the 19 green tech offerings in the second quarter came from Chinese companies and raised $1.73 billion, or 75 percent of the total IPO take, according to the Cleantech Group.

The flip side, of course, is that the anemic IPO market in the United States also is driving venture capital investment as green tech firms are forced to raise private money.

photo: Ausra

In Wednesday’s Los Angeles Times, I write about green tech guru Vinod Khosla’s new $1.1 billion venture funds — the biggest first-time fund since the halcyon days of the dot-com era a decade ago and and a strong signal that investors see a bright future in clean and green technologies. CalPERS, the United States’ biggest pension fund, is the major backer of the new Khosla Ventures’ funds:

In a sign that green technology investing is bouncing back, Silicon Valley venture capital firm Khosla Ventures said Tuesday that it had raised $1.1 billion to spur development of renewable energy and other clean technologies.

It is the biggest first-time fund in a decade and comes as venture capital investment in green technology is just beginning to recover from a precipitous fall prompted by the global economic collapse last fall.

In the first half of the year, investments in green tech plunged to $513 million from $2 billion in the first six months of 2008, according to a survey by PricewaterhouseCoopers.

But Vinod Khosla, founder of Khosla Ventures in Menlo Park, Calif., and a leading green tech guru, has managed to raise an $800-million fund to invest in early and mid-stage clean energy and information technology companies as well as a $275-million fund to finance what he called high-risk “science experiments” that may exist only in a university laboratory.

About Green Wombat

Green Wombat is written by
Todd Woody, a veteran environmental journalist based in California who writes for The New York Times, the Los Angeles Times, Grist and Yale e360. He's one of the few people on the planet who have held a northern hairy-nosed wombat in the wild.

Todd formerly was a senior editor at Fortune magazine, an assistant managing editor at Business 2.0 magazine and the business editor of the San Jose Mercury News.